Interest Rates have been rising rapidly as the Fed attempts to restrict inflation. The 2/1 Buy Down is designed to help Home Buyers keep initial payments affordable and “Grow Into” future payments.
Sellers are much more motivated now and frequently will offer closing cost credits to entice buyers. Discuss with your Real Estate Agent about writing on offer to request a seller credit. If the credit given is sufficient you can take advantage of the 2/1 Buy Down program. Here is how it works.
Hypothetical Loan Amount 500,000
Hypothetical Interest Rate 6.5%
Hypothetical Payment 3,160 (Principal and Interest)
With 2/1 Buy Down
Year 1 Payment 2,533 (12 months at 4.5% Rate)
Year 2 Payment 2,838 (12 months at 5.5% Rate)
Year 3-30 Payment 3,160
If you expect your income to increase over first 24 months, the 2/1 helps to keep things manageable. If interest rate ever come back down to more attractive levels you Might be able to refinance before the 3rd Year Begins.
2/1 Buy Down is available on Fannie Mae, Freddie Mac, FHA and VA Loans. Only for purchase loans, only if seller provides sufficient credit. For lesser seller credit we also have 1/0 Buy Down (1 Year of 1% reduction)
Call us at 619-296-5881 to learn more. We can also help explain to Real Estate Agents looking to introduce the program to their clients.